The Japanese parliament has finally… FINALLY, passed a bill legalizing casinos in the island nation. Now, investors from some of the largest casinos in the world are considering dropping massive investments in the new industry.
Japan's parliament passed a law that orders the government to start crafting rules to legalize casino. Finally.
— Takashi Mochizuki (@mochi_wsj) December 14, 2016
The reason it took so long? Fears of addiction expressed by the country’s largely Buddhist core, as well as potential money laundering. These concerns are interesting, considering that Japan already allows other forms of gambling, including on boat and horse racing. But a survey published this week found that only 12% were in favor of lifting the casino ban. This bill has been tried before, but failed after being submitted to Parliament in 2013.
There’s already a form of gambling in Japan, albeit not a direct cash payout, called Pachinko. It’s basically pinball but with slightly different parameters. Pachinko parlors are quite popular because they offer tangible prizes—they don’t offer direct cash winnings.
Japanese business leaders are now chomping at the bit. Among them is the CEO of Konami Gaming, Mr. Satoshi Sakamoto. He has been tapped to head a new company that will invest in Japanese casinos as soon as the legislation is formalized.
American companies such as MGM Resorts International, Wynn Resorts Ltd, and Caesars Entertainment Corp are prepping for a battle to obtain operating rights. MGM has already said they might invest as much as $10 million into new casino operations.
Potential sites for the casinos include Osaka and Yokohama, which are separated by a 3 hour train ride. Osaka is clearly on the cutting edge of everything, announcing today that they are introducing a robotic checkout system in local grocery stores. It is also the second largest metropolitan area in Japan. Meanwhile, Yokohama is Japan’s second largest city overall, behind Tokyo. Both would likely see an enormous amount of business from a new casino.
The key in implementing these new properties could lie in their local communities’ ability to provide adequate regulations, and guarantee homeowners that they won’t pop up in their neighborhoods. As is the case with most “controversial” new facilities, people don’t want them in their backyards.
Another part of Asia is on the cusp of striking it big in the gambling business. The Chinese territory of Macau increased its gaming revenues by 1.1% in August of this year, compared to the same time in the previous year, causing casino stocks to surge worldwide. Macau is the only area of China that allows gambling.
Hopefully Macau’s success, paired with the surging stock market of late, will fuel the emergence of a burgeoning gambling industry in Japan. No casinos are expected to be built until 2020.